Research shows the business case for circular buildings

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The construction industry is responsible for the consumption of roughly half of virgin resources globally and close to 40% of global carbon emissions and solid waste streams. Embracing a circular and regenerative approach in the built environment will be key to enable a just transition to a low-carbon economy and limit biodiversity loss.

The report illustrates examples from the industry, highlighting benefits such as reduced costs and emissions, and increased asset valuation as part of the business case for implementing circular solutions. However, established industry approaches need to evolve in order to better measure the benefits of circular solutions quantitatively.

"The discussions being held at COP26 billed as ’humanity’s last best chance to avert climate catastrophe’ send a clear signal of the speed and scale of response needed.

Building circular approaches into the construction industry can be a game changer in the impact on the planet whilst also bringing new commercial opportunities. With investors increasingly assessing the environmental, social and governance credentials of businesses, and the ongoing development of new economic taxonomies, now is the time to introduce circular approaches.

"However, the construction industry is still struggling to define, generate and capture the associated value from circular approaches, a clear learning curve is required from the industry", says Phil Kelly, Ramboll’s Director for Sustainable Solutions in the UK.

Full report: The business case for circular buildings

Economic value of circular building solutions

Based on a literature review, a global survey and several case studies, the report shows emerging evidence of the economic value of circular building solutions, such as:

• Avoided costs from new land acquisition and landfilling costs by prioritizing existing building land use
• Increased asset value through accounting for residual material value and reduced deconstruction and landfilling costs
• Lease price advantage delivered through reductions in energy costs and service charges through circular building design and use of novel business models that are service-centered rather than product-centered
• Market differential and rapid sales through enhanced branding and local community buy-in

Other partners were involved in the report including Lendager, who provided practical insights from circular projects like Resources Row - whose facade uses upcycled bricks from the historic Carlsberg brewery.

Environmental and social value of circular building solutions

The report highlights significant reductions in carbon emissions and waste production for developments that prioritize circular economy approaches. 

It points to additional value for the local economy and communities, such as the creation of local material marketplaces and local jobs, and the preservation of cultural heritage, although these benefits remain difficult to quantify.

Putting this into practice

To further enhance in particular the economic value case of circular buildings, the report emphasizes the need for more quantitative data on financial benefits to mainstream circular economy practices in the construction sector. 

“A circular building has shown not just to be an important tool in cutting carbon emissions, but a tool that delivers value right across its lifecycle. Whether these are creating new jobs and skills needed to build circular into the workforce, or buildings that are maintainable and can be easily adapted for future uses.

We are seeing the business advantage from circular buildings. These are buildings with a competitive edge in the market and are setting the tone for how to build in a more regenerative and low carbon economy.

“To help the industry learn, collaborate and adapt to circular ways of working, we call on business to measure circularity and consistently use established industry tools such as whole-life carbon and life-cycle costing approaches to inform early decision-making” concludes Ramboll’s building performance specialist, Austen Bates.

Full report: The business case for circular buildings 

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